The World Bank International Advisory Group for Government Payments Technical Meeting – Rome, Italy June 20-21, 2011 SADAD Payment System By Abdulmalik.

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Presentation on theme: "The World Bank International Advisory Group for Government Payments Technical Meeting – Rome, Italy June 20-21, 2011 SADAD Payment System By Abdulmalik."— Presentation transcript:

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The World Bank International Advisory Group for Government Payments Technical Meeting – Rome, Italy June 20-21, 2011 SADAD Payment System By Abdulmalik Alsheikh

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SADAD Payment System The first stage started in the beginning of the 1980s when SAMA mandated that all banks should accept bill payment at their branches… 3 Beginning 1980s Beginning 1980s Problem 1990s Problem 1990s Solution 2000s Solution 2000s Reform Today Reform Today

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SADAD Payment System The first stage started in the beginning of the 1980s when SAMA mandated that al banks should accept bill payment at their branches… s SAMA mandated banks to accept bill payments at branches Utilities' Revenue Was Government Revenue Customers only have bank branches and utility offices to pay Limited Number Of Bills Manual Collection Process SAMA mandated banks to accept bill payments at branches Utilities' Revenue Was Government Revenue Customers only have bank branches and utility offices to pay Limited Number Of Bills Manual Collection Process Electricity Telephone Water Bank Branches Utilities Offices Bank Branches Utilities Offices

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SADAD Payment System The number of bills has increased with the introduction of mobile telecom services and liberation of the telecom market which led to consumer complaints regarding bill payment s The number of utility bills has grown from 70M in 2000 to 250M in 2007 Telecom moved from quarterly billing to monthly or bimonthly Number of services require regular payments grew from 5 billers to 100+ Government services grew to about 60 million annual transactions The number of utility bills has grown from 70M in 2000 to 250M in 2007 Telecom moved from quarterly billing to monthly or bimonthly Number of services require regular payments grew from 5 billers to 100+ Government services grew to about 60 million annual transactions Number of mentions, Time Consuming =100 Having to keep track of multiple bills Time consuming Delays/Loss in postage Overlooking payment dates Disconnection of service due to delays in bill processing Inconvenient Handling large cash amounts Top Consumer Issues Concerning Bill Payment

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SADAD Payment System In the third stage SAMA introduced SADAD to allow consumers to pay using all the banking channels regardless of the bank and opened the network to every biller… 7 Beginning 1980s Beginning 1980s Problem 1990s Problem 1990s Solution 2000s Solution 2000s Reform Today Reform Today

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SADAD Payment System With time banks started to link electronically with utility providers to open new electronic channels to consumers but that only improved little the consumer experience in bill payment.. 8 Pre SADAD Bill Payment Network Electricity Telecom Water Bank A Bank B Bank C Government Bank D Consumer Manual Collection Process Slowly Shifted To Electronic Process This direct links models prevented many billers from entering this payment network Banks resisted any new billers since there is financial no incentive to do so This model could is not sustainable due to increasing growth in bill payment transactions, high entry barriers and indirect subsidies by banks to billers Manual Collection Process Slowly Shifted To Electronic Process This direct links models prevented many billers from entering this payment network Banks resisted any new billers since there is financial no incentive to do so This model could is not sustainable due to increasing growth in bill payment transactions, high entry barriers and indirect subsidies by banks to billers 2000s

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SADAD Payment System It was clear that there was a need for a centralized system that acts as an interface between billers and banks, so billers can use the banking channels with low cost… 9 SADAD EBPP Model SADAD Biller A Biller B Biller N Bank A Bank B Bank N Consumer Pre SADAD Bill Payment Network Electricity Telecom Water Bank A Bank B Bank C Government Bank D Consumer 2000s

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SADAD Payment System It was clear that there was a need for a centralized system that acts as an interface between billers and banks, so billers can use the banking channels with low cost… 10 SADAD EBPP Model SADAD Biller A Biller B Biller N Bank A Bank B Bank N Consumer Centralized and shared infrastructure Provides all Billers with access to Banks channels without discrimination increase transparency of government collection process significantly reducing the time spent by consumers paying bills Improve availability of collected Money from days to only 1 business day Centralized and shared infrastructure Provides all Billers with access to Banks channels without discrimination increase transparency of government collection process significantly reducing the time spent by consumers paying bills Improve availability of collected Money from days to only 1 business day 2000s